Banking securities as stock-in-trade: factual finding left no referable question of law

Investment in Government securities and trustee securities was treated as part of the assessee's banking business and as stock-in-trade because such investments were found to be an essential incident of lawful banking operations. On that factual basis, the Tribunal concluded that the proposed reference did not raise any debatable or referable question of law. The matter therefore turned on the character of the securities in the hands of the assessee and the factual finding already recorded, rather than on a fresh legal controversy.

---

---

Issues: Whether the Tribunal's view that the assessee's investment in Government and trustee securities formed part of its banking business and constituted stock-in-trade gave rise to a referable question of law.

Analysis: The Tribunal had found, on appreciation of facts, that investment in Government securities and trustee securities was an essential incident of the assessee's banking business and a requirement for carrying on that business in a lawful manner. The question sought to be referred was therefore based on a factual determination already concluded by the Tribunal, supported by the legal position governing banking operations and the character of such securities in the hands of the assessee. On that basis, no debatable or problematic question of law arose for reference.

Conclusion: No referable question of law arose; the assessee's securities were correctly treated as stock-in-trade and the reference applications were dismissed.

---